5:24 pm PDT
One piece of good news in the debt ceiling debate today: Congress is coming up with specific proposals. The talks with President Obama were a waste of time. The president was not negotiating, he was firm on almost every point: raise taxes, extend US borrowing power beyond the 2012 election. And he wanted as few spending cuts as possible.
The matter of deciding if the US may borrow more money and how much, is the job of Congress. President Obama is abusing the power of his office by asking cable and broadcast television to give him time to campaign for his position in less than an hour. Mr. Obama knows he is a good, if long-winded, speaker and figures he can manipulate words and numbers to convince the American people that his way is the only correct one.
As for the two plans presented today:
House Republican plan
* First of two stages would be a vote to raise the debt limit by $900 billion through 2011, $1.2 trillion in spending cuts, no tax increases.
* Committee from both House and Senate must specify another $1.6-1.8 trillion in savings through entitlement changes and tax reforms, followed by another vote to further raise the debt limit. (total debt increase=approx. $2.6 trillion)
Senate Democratic plan
* $2.4 trillion increase in the debt limit through 2012, spending cuts equaling about $2.7 trillion ($1.2 trillion discretionary over 10 years, $1 trillion savings from ending the Iraq and Afghanistan wars, $400 billion savings on debt interest, $40 billion from stopping waste and fraud), no tax increases or changes to entitlements.
* Committee to identify more spending cuts by December.
Neither plan includes enough spending cuts. They could certainly find more than $40 billion in waste. In fact, in March the Government Accounting Office identified redundant programs that, if consolidated, could save $200 billion over 10 years. (Can I get an explanation as to why that is not being done right now?)
The plan unveiled by Speaker John Boehner is superior in that it would address reforming the tax code and making changes to entitlements to save money and keep Social Security solvent. But, despite the political advantages, the two-vote idea is cumbersome.
Senate Majority Leader Harry Reid is to be commended for presenting a plan that has more spending cuts than debt ceiling increase and does not raise taxes. BUT, because the plan includes savings from the ending of the Iraq-Afghanistan wars – savings we will achieve even without including it in a debt plan – I am skeptical of other savings in this plan. The April budget plan that averted a government shutdown included $38 billion in spending cuts, but the Congressional Budget Office said it actually cut only $352 million. Senator Reid was key in those negotiations – can we expect similar sham cuts in this plan?
I will listen to what President Obama has to say, unless he spends the time bad-mouthing Republicans. He needs to be specific; he has not come up with a detailed plan despite a week’s worth of White House meetings.
(Information from cnn.com and foxnews.com)